Good morning Chairman Leahy, Senator Specter, and Members of the Committee. I am pleased to be here today.

As you know, the Federal Bureau of Investigation (FBI or Bureau) marked its 100th anniversary this past July. We were honored to have several of you join us for our celebration at the National Building Museum. We looked back over our century of service to America—from the earliest days, when 34 investigators focused on the few federal crimes that existed, to today, when over 30,000 employees are combating crime and terrorism across the country and around the world.

The crimes we confront have changed dramatically through the decades, from violent gangsters to Nazi saboteurs, from foreign spies to organized crime rings, and from computer hackers to terrorists. And the FBI has changed along with them, always evolving to meet the threats of the moment. Each historic period has prepared us for the challenges of the future. And while it is a time of tremendous change in the Bureau, our values will not change. The rule of law, civil liberties, and civil rights—we do not perceive these as our burdens but among our core missions, as they have been for the past 100 years. And while I assure you that we are preserving the finest traditions of the FBI, it is the future that I would like to talk about today.

When I have come before this committee over the past several years, I have discussed the FBI’s transformation from an organization whose primary mission was law enforcement into a national security organization that is focused on preventing crime and terrorism, not just investigating the perpetrators after the fact. And I have recounted our many improvements and accomplishments in each of our priority areas.

But marking milestones is about more than looking backward; it is also about looking forward. And so today I want to focus on what the FBI is doing—and will continue to do—in order to ensure that we can serve the American public for the next hundred years. In the interest of time, I will focus on four specific areas: intelligence, investigative techniques, technology, and human capital.

Intelligence

First, intelligence. Intelligence is crucial to every investigation and operation the Bureau undertakes. The FBI has always excelled at gathering intelligence, even if we did not always call it that, and using it to build cases that lead to courtroom convictions. After the attacks of September 11, 2001, we realized that we also had to strengthen our intelligence analysis and dissemination.

I have discussed our efforts in great detail in the past, from ramping up hiring and training of intelligence analysts to establishing the Directorate of Intelligence and the National Security Branch at Headquarters. But intelligence gathering does not happen at Headquarters, it happens out in the communities we serve.

And so each field office established a Field Intelligence Group (FIG), made up of agents, analysts, linguists, and surveillance specialists. These are the operational arms of our intelligence program. Their mantra is “Know Your Domain,” and they are focused on identifying and assessing every threat in their regions.

Their work is not limited to counterterrorism threats. For instance, a field office near a research university or defense contracting firm might also focus on potential espionage or proliferation threats. An office along the Southwest border might also focus on violent transnational gangs. And our offices around the country from large cities to rural areas are concerning themselves with rises in violent crime where they occur.

As the FIGs evolved, each office developed its own model for intelligence gathering and operations. As our intelligence capabilities continued to increase, it was necessary to evaluate the different models that had emerged and move towards uniformity. And so we established a Strategic Execution Team (SET) to help us assess our intelligence program, evaluate best practices, decide what works and what does not work, and then standardize it across the Bureau. The purpose of the SET is to accelerate improvements to our intelligence capabilities, to ensure we are an intelligence-driven organization and to drive a change in mindsets throughout the FBI. To do this, we restructured the FIGs so they all conform to one model, which is slightly modified depending on whether the size of the field office is considered to be small, medium, or large. As newly restructured, we believe the FIGs will be able to better coordinate with each other and with Headquarters. And because they all follow a single model, a special agent or analyst working on the FIG in the Atlanta office could easily transition to the FIG in the Albany office.

This effort has been integral to the FBI’s effort to establish itself as a full partner in the wider intelligence community. The FIGs now have well-defined requirements for intelligence gathering, analysis, use, and production. And managers are now accountable for ensuring that intelligence production is high-quality, lawful, and relevant to the requirements not just of their local community, but of the larger intelligence and law enforcement communities. In short, the FIGs now operate consistently with the FBI’s position as a full and active member of the intelligence community.

We regularly share this intelligence with our partners in more than 18,000 law enforcement agencies around the country. We also collaborate closely with our international counterparts. And as the world continues to flatten and threats continue to migrate across borders, it is more important than ever for the FBI to be able to develop and disseminate information that will assist our partners.

Our national security is at stake. Indeed, our global security is at stake. And so we are hard at work implementing the recommendations of the SET. We have already implemented the recommendations in 24 field offices. By December, we will complete the rollout to the remaining field offices.

This is not a program that is being implemented as a quick fix. This work is critical to the long-term success of the FBI. We are training FBI personnel at all levels in order to inculcate the intelligence mission long past the rollout. We have clear metrics for success and clear accountability for ensuring they are met. We are committed to fully implementing these plans and making our intelligence capability second to none.

Investigative Techniques/Attorney General Guidelines

Our employees are collecting, analyzing, and sharing intelligence under an improved internal framework, and soon they will also be operating under new investigative guidelines. I would like to spend a few moments discussing the new Attorney General Guidelines for Domestic FBI Operations, which are in the process of being finalized and which have been briefed to your staffs. With the help and input of this Committee, it is my hope and expectation that we can make these guidelines effective for agents operating in the field in the near term.

Special agents have previously depended on several sets of guidelines to guide their investigations. Each set was tailored to a particular program or topical area, and different rules therefore governed different types of investigations. These included different rules for national security investigations versus criminal investigations.

To give you a few examples, the guidelines governing national security investigations prohibited recruiting or tasking sources unless the FBI had at least a Preliminary Investigation open. They also prohibited physical surveillance other than casual observation in that context. The General Crimes Guidelines, which governed other criminal investigations, did not contain these limitations.

For the most part, these rules were sufficient and appropriate for the threats they were meant to address. However, criminal threats and national security threats no longer fall neatly into separate categories. The threat of today, and of the future, is a dangerous convergence of terrorists, hostile foreign governments, and criminal groups operating over the Internet and through interconnected, sophisticated networks. We may see organized crime laundering money for drug groups. Drug groups selling weapons to terrorists. Terrorists committing white-collar fraud to raise money for their operations. And most threatening of all, hostile foreign governments arming terrorists with an arsenal of biological, chemical, and radiological weapons.

Historically, the Attorney General Guidelines have been periodically updated to address the increased sophistication of the threats we face and updated to ensure that civil liberties are protected as more sophisticated tools became available to counter these threats. The new Attorney General Guidelines are the next logical step in the evolution of the Guidelines and a necessary step if the FBI is to continue its transformation from a traditional law enforcement agency into an intelligence-driven organization that succeeds as both a premier law enforcement agency and a full-fledged member of the United States Intelligence Community. The result is a single set of guidelines that are reconciled, consolidated, and, most importantly, simplified. No longer will there be different rules for different types of investigations.

The new guidelines will replace five separate sets of guidelines with a single set of rules to govern the domestic activities of our employees. The new guidelines set consistent rules that apply across all operational programs, whether criminal or national security. They will give us the ability to be more proactive and the flexibility to address complex threats that do not fall solely under one program. They will eliminate inconsistencies that have the potential to cause confusion and create compliance traps for our employees.

The new guidelines are not designed to give, and do not give, the FBI any broad new authorities. The vast majority of the authorities outlined in the guidelines are not new, but techniques that were permissible under certain circumstances for criminal matters will now also be available for national security matters, and vice versa.

The FBI has the responsibility—indeed, the privilege—of upholding the Constitution. We know that if we safeguard our civil liberties but leave our country vulnerable to terrorism and crime, we have lost. If we protect America from terrorism and crime but sacrifice our civil liberties, we have lost. We are always mindful that our mission is not just to safeguard American lives, but also to safeguard American liberties. We must strike a balance. The new guidelines have been carefully designed to ensure that we can and do strike that balance.

The new guidelines and policy frame work will provide strong oversight and accountability. They will help us to realize the improvements being implemented across the field by the SET, which I just discussed. And they will allow us to be more proactive, more predictive, and more preventative—and better able to meet the threats of the future.

Technology

The third area of focus is technology, which goes hand-in-hand with intelligence. Our mission is to gather the right intelligence, analyze it the right way, and share it with the right people at the right time. In order to do that, we must have the right technology.

As you know, we have made substantial progress in replacing and transforming the FBI’s information technology systems to help us confront current threats and mission needs.

Our flagship program is Sentinel, a web-based case management system designed to support both our law enforcement and intelligence mission. Phase I was deployed Bureau-wide in June 2007.

Information is accessible as web content rather than the former green screen presentation. Sentinel will move us from our dependence on paper files and will make information more accessible, faster, and easier to analyze.

Phase I set the foundation for the entire enterprise. Working with Lockheed Martin, we are developing and incrementally delivering Phase II service. The first Phase II delivery occurred this April and continues through summer 2009. The remaining phases will continue to deliver additional capability through the end of the program in summer 2010.

Other information technology systems that will dramatically enhance our ability to efficiently carry out our mission include: DELTA, which is a human source management database that will provide a uniform means to administer all facets of human source operation more efficiently and accurately; the Operational Response and Investigative Online Network, which is the next generation Crisis Information Management System and provides case-management and related information-processing capabilities to support federal, state, local, and tribal law enforcement and emergency personnel at special events or other critical incidents; and e-GUARDIAN, a suspicious incident reporting information-sharing system for federal, state, and local law enforcement.

We are also working to strengthen the information technology programs that allow us to communicate with our partners.

For example, we have improved our ability to disseminate intelligence reports by integrating our reports and messaging systems, allowing intelligence reports to be created, reviewed, and disseminated without interruption. We have also launched an initiative to consolidate the FBI’s Unclassified Network with Law Enforcement Online (LEO), which is the secure network we use to share unclassified information with registered law enforcement partners. This will provide a single platform for FBI employees to communicate with internal and external partners. LEO already supports over 115,000 of our partners. We have also expanded our desktop Internet access to over 19,000 agents, analysts, task force, and support personnel. When completed, we anticipate approximately 39,000 Internet-connected desktops will have been deployed at all FBI locations. In addition, we have distributed over 20,000 BlackBerry devices that have e-mail, Internet browsing, and custom features to FBI personnel.

Another one of our near-term goals is to make LEO the system of choice for transmitting international fingerprint cards from all over the world. And we have initiated an Advance Authentication project to implement stronger, simpler user authentication for LEO users. This is scheduled to deploy in November 2008.

We are also in the midst of developing the Next Generation Identification (NGI) system. NGI will expand the FBI’s Integrated Automated Fingerprint Identification System (IAFIS) beyond fingerprints to advanced biometrics. It will also produce faster returns of information, enabling law enforcement and counterterrorism officials to make tactical decisions in the field. Criminals ranging from identity thieves to document forgers to terrorists are taking advantage of modern technology to shield their identities and activities. This trend will only accelerate. And so our new system will include not just fingerprints, but additional biometric data from criminals and terrorists. It will give us—and all our law enforcement and intelligence partners—bigger, better, and faster capabilities as we move forward.

Part and parcel with our work to improve and enhance our ability to manage, make available, and quickly search biometrics information are efforts we have ongoing to enable our own agents and our partners with deployable biometrics tools. We are presently piloting a number of systems that hold promise to be very useful in not only the collection of biometrics data, but also support the rapid search of biometrics databases in the field. The true power of advanced biometrics in the national and homeland security arenas is only realized when authorized users, ranging from patrol officers working the streets of America to Department of State officers screening visa applicants abroad, have the ability to quickly gather data on those persons they encounter in real-time search appropriate databases. That kind of capability requires close collaboration with other federal, state, and local agencies, who also collect and store biometric data; the development and deployment of portable and interoperable technology; and strict adherence to all applicable laws and regulations to ensure our actions protect privacy and preserve civil liberties. Such collaboration has taken a giant leap forward with the completion of a memorandum of understanding between the Departments of Justice, State, and Homeland Security for the sharing of their respective biometric data, and will become operational this October.

And we have also developed a system called the Law Enforcement National Data Exchange (N-DEx). N-DEx is a national information-sharing system, accessible to law enforcement agencies through a secure website. It will allow nationwide searches from a single access point. We successfully completed the initial deployment this past March and will continue to refine it.

Law enforcement officers will now be able to search databases for information on everything from tattoos to cars, allowing them to link cases that previously seemed isolated. They will be able to see crime trends and hotspots, access threat level assessments of individuals or locations, and use mapping technology. It is not a new records system; it just allows us to connect the information we already have. Crime and criminals move freely across jurisdictions, and so must we. N-DEx is exactly the type of technology we need to connect dots and connect law enforcement agencies from coast to coast.

Human Capital

Everything I have just discussed—the SET initiative, the new Attorney General Guidelines, and improved technology—will strengthen the FBI’s intelligence capability and make us a world-class national security organization. That is the goal we strive for every day. And this goal begins and ends with the FBI’s most important asset—its people.

As you know, we have been hard at work building a strong human resources program in order to ensure we have optimal recruiting, hiring, training, and retention of our employees.

Our current challenges are threefold: one, we confront an aging workforce. About 70 percent of our employees are between the ages of 35 and 54, and another 10 percent are older than 55. Two, we require a workforce with a broad range of highly specialized skills. And three, we need to not just retain these employees but also train them to lead the FBI into the future.

Historically, the FBI has attracted recruits from the law enforcement, legal, and military communities, particularly to fill our special agent ranks. This has served us well as a law enforcement agency. But as we develop into a national security organization, we also require employees with specialized skills—intelligence analysts, scientists, linguists, and computer experts.

And so we are implementing a number of programs to target our recruitment of individuals with these critical skills and to fill our ranks with fresh talent—people who are ready to build on the foundation laid by our senior employees. New employees are bringing significant skills and experiences acquired from prior employment or academic pursuits. In our current New Agents classes we have individuals with backgrounds in computer network engineering, computer programming, Arabic language and literature, and in various sciences. Several trainees also bring with them prior intelligence experience, military and otherwise.

We have approached our human resources challenges strategically, just as we would a complex investigation or operation.

First, we are strengthening our relationships with universities as a primary source of recruiting individuals who want to build a career in national security at the FBI. Our goal for the next several years is to hire 300-400 recent college graduates per year. We also plan to hire about 300 Honors Interns each summer, with the hope of bringing them on board in the future and creating a pool of talent for agent and non-agent careers in the Bureau.

Second, we are conducting a separate targeted intelligence hiring initiative to bring hundreds more intelligence analysts on board. Our program is modeled after successful programs in other intelligence agencies. We are using what we call the “best athlete” approach, targeting students at selected colleges and universities. We are looking for students pursuing analytic majors, including the hard sciences, math, economics, and engineering, as well as students with foreign language skills.

In addition, as part of the SET initiative, we piloted new recruiting techniques for intelligence analysts on four campuses, employing some of the same methods that have worked for successful corporations. We plan to apply what we have learned to our future recruiting efforts.

Third, we are expanding our career paths for intelligence analysts and intelligence special agents so that we can grow a highly skilled cadre of intelligence professionals. The analyst career path provides early training, mentoring, and a range of job experiences, as well as opportunities for advancement. Analysts will rotate through a series of positions to become fully familiar with all aspects of the intelligence cycle, and then can choose a specialty considering the needs of the organization and progress all the way up through the ranks of the Senior Executive Service.

We have also developed a career path for special agents who specialize in intelligence. While all agents play a role in intelligence collection, intelligence special agents are playing dedicated roles on the Field Intelligence Group. This follows a recommendation of the SET initiative. Intelligence special agents focus on collecting intelligence against requirements by conducting liaison and managing human sources. In essence, they are dedicated Human Intelligence (HUMINT) collectors, whose mission is to recruit and use human sources to fill in “the spaces between the cases.”

Fourth, we are strengthening our training programs. The FBI Academy at Quantico and the National Academy have long been considered premier law enforcement training academies. We need to build a similar program that focuses solely on intelligence. And so we have established an Intelligence Training Section at Quantico. We have also developed HUMINT training courses jointly with the Central Intelligence Agency (CIA), and we are leveraging CIA instructors to provide the training. And we have revamped the New Agents Training curriculum to include an additional 100 hours of national security and intelligence training.

We have worked hard to develop and provide more training opportunities for employees at all levels. We have leveraged technology for many courses, which employees can take online through our Virtual Academy. We are aiming to increase the length and number of training opportunities available to the greatest extent possible, given budgetary constraints. Where we cannot provide specialized training courses ourselves, we plan to expand our partnerships with other intelligence community programs, noted academic universities, and private industry.

We are focusing on developing leadership at all levels, to ensure the FBI has solid leadership as we move into our second century of service. Career paths are an important part of our effort, because each time employees move another step along their career paths and up the ladder, they build invaluable skills, which they bring to their next assignments. One of our goals is to establish career paths for all professional staff, not just agents and analysts.

Finally, we are focused not just on building isolated skills but on building a culture of leadership. We have developed a number of leadership programs, each of them geared to specific levels of management. For example, we partnered with the Kellogg School of Management to provide leadership training to our managers and executives. We initiated a succession plan for Senior Executive Service positions, to ensure we have highly-qualified managers moving up through the ranks and ready to take the places of retiring employees. We are working to create higher-level, senior management positions and leadership opportunities for all personnel, including our intelligence cadre and professional staff. We want to emphasize to our people and to the American public that leadership is a core value at the FBI and anyone can be promoted into senior positions based on their leadership ability, not just based on their job title.

The FBI has always been fortunate to have tremendously talented leaders. Many of them rose through the ranks of the Senior Executive Service, some were recruited from outside of the FBI, and others simply led from whatever position they held. But we cannot have leadership on an ad hoc basis. We must have an ethos of leadership at all levels.

That is why we are placing such an emphasis on human capital. We know how important it is to invest the time and resources in our employees, and develop their leadership potential over time. The men and women of the FBI have always been willing to do whatever it took, with whatever equipment they had, to carry out the mission of the FBI. They are extraordinarily dedicated public servants. A recent survey of FBI employees that included standardized questions that are asked in private industry and in other sectors of government, including the intelligence community, supports this. The survey highlighted the fact that our employees overwhelmingly feel that their work is important, that they enjoy their work, and that they are committed to the mission of the FBI. Enhancing the leadership capability of those who are leading such motivated and talented individuals and investing the time and resources into developing all employees through all levels of the organization can only enhance the FBI’s ability to accomplish our national security mission. We are committed to providing the training, the mentoring, and the job experiences that will hone their management skills. We know that today’s young employees are the leaders of tomorrow’s FBI, and we are committed to ensuring that the FBI has continuous and strong leadership well into the future.

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Over the past 100 years, the FBI earned a reputation for protecting America that remains unmatched. As we round the corner on a century of service, we in the FBI are always mindful of the dedicated people who came before us—the agents and professional staff who worked so hard to build the FBI into the agency that we cherish and on which America depends. Whenever I swear in a class of new agents, I always tell them that when they go anywhere in the world and tell someone they are an FBI special agent, they will immediately have that person’s respect. We are determined that they always will.

Unlike the FBI of 1908, today’s FBI is much more than a law enforcement organization. The American public requires that we be a national security organization, driven by intelligence and dedicated to protecting our country from all threats to our freedom.

For 100 years, the men and women of the FBI have dedicated themselves to safeguarding justice, to upholding the rule of law, and to defending freedom. As we look back on the past 100 years, we renew our pledge to serve our country and to protect our fellow citizens with fidelity, bravery, and integrity for the next 100 years, and beyond.

Mr. Chairman, I would like to conclude by thanking you and this Committee for your service and your support. Many of the accomplishments we have realized during the past seven years—and many of the goals we will realize in the future—are in great part due to your efforts.

On behalf of the men and women of the FBI, I look forward to working with you in the years to come as we continue to develop the capabilities we need to defeat the threats of the future. I would be happy to answer any questions you may have.